Fitch sees political tensions unresolved because of inconclusive election

Breaking News February 04, 2014 00:00

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The February 2 election has failed to ease political tension and if the five-month political stand-off worsens, it could raise the risk of a lasting negative effect on economic performance and financial stability relative to its rating peers, Fitch Rating

Fitch thinks political tensions are already weighing on economic activity - evident from a contraction in manufacturing output of around 7 per cent year on year in the fourth quarter last year.

"We expect the Thai economy will bounce back when political tensions eventually ease, underpinning our expectation of 3.5 per cent growth in 2014. But more prolonged and intensified political confrontation could eventually impair Thailand's economic performance relative to its rating peers, and which could undermine this credit strength," Fitch Ratings said.